The dynamic approach to business models

The many definitions of business models can be summarized into two distinct approaches, the static and the transformational. This paper proposes a third approach, namely a dynamic approach to business models and argues that the flexible and adaptive nature of business models can be developed further based on the industrial network approach. The business model is embedded in business contexts and business networks, and is dependent on changes in the business environment. Due to these mutual dependencies between business network actors, and in the pursuit of new capabilities and resources, the business model may also build on co-production, collectivity and sharing, and be utilized by the many actors embedded in value networks. This differs from the traditional view, in which companies create value independently of each other. A networked, flexible, and co-produced business model offers a novel tool for strategizing turbulent business environments.